Number of Record

Centers:

More than 650 facilities totaling more than 47 million square feet.

Number of Employees:

More than 10,000 employees worldwide.

“Do you remember that closing scene in Raiders of the Lost Ark?” asks Michael Rooney, director of Construction at Iron Mountain, Boston, as we walk up to the company’s storage warehouse in Northborough, MA. Rooney describes the memorable movie scene when the crated Ark of the Covenant is wheeled into a cavernous government storehouse. Stepping through a series of locked doors and past a modest reception area, Iron Mountain visitors are presented with a sight right out of Raiders’ final scene – awestruck once they enter the vast warehouse space.

Seven straight stories of stacked cardboard boxes in row after row after row rise up to the warehouse’s rafters. Similar boxes in similar warehouses generously dot the globe in North America, South America, and Europe, storing approximately 207 million cubic feet of paper. This is Iron Mountain.

Headquartered in Boston, Iron Mountain is the largest records management company in the world. With facilities in 81 U.S. and 47 international markets, the organization’s portfolio is comprised of approximately 46 million square feet of commercial space. Established in 1951, Iron Mountain now consists of several divisions in records and information management services.

Box Business – and More

The company’s main division, which represents the vast majority of its revenue stream, is commonly known as the “box business.” This division handles the storage of carton containers, which are the records stored by customers for either historical and/or legal reasons.

Iron Mountain’s two major service lines – records management and data protection – focus on helping customers manage and protect their information. Because of recent corporate ethics crises, new laws and regulations, and the technology boom, records and information management has risen to the forefront. Many businesses are considering creating sound records management policies to ensure compliance with document retention requirements.

Business continuity is also a strong concern for today’s industries. Yet, creating and maintaining the internal infrastructure for data backup and recovery can be difficult and expensive. Many industries are looking to reduce the risk of disaster or sabotage with off-site backup data.

The company’s Off-site Data Protection services provides for its customers: Off-site Vaulting, Electronic Vaulting, Disaster Recovery Support Services, and Film and Sound Archiving. The Film and Sound Archiving, located in Hollywood, New York City, and Nashville, is one of Iron Mountain’s most exciting departments, storing a wide range of media from rare films to original music recordings. Digital Archiving, which is the storing of e-mails for archival purposes, is another exciting business division. Comac and DSI Technology Escrow Services, both Iron Mountain companies, provide fulfillment services and technology escrow services, respectively.

Mountain Climbing

“We are in the throes of designing a secure shredding business now,” says Tony Ryan, vice president, Iron Mountain. Recent years have witnessed tremendous growth for the company with new acquisitions and new business ventures, such as the rapidly growing shredding business.

In 1988, Iron Mountain acquired Bell & Howell Records Management Co., and its real estate needs and responsibilities greatly expanded. “At that time, we had not more than 1 million square feet [of space] and the rest is history. We have grown from there,” says Ryan. Since 1988, the company has swelled from a $10 million company to a $1.17 billion company in 2001 after recent acquisitions.

“We are totally different than any other corporate real estate firm we have ever dealt with. We are different from any other corporate real estate department I have seen in another company,” says Ryan. Coming from a development background, Ryan has served the organization for over 15 years. He heads the real estate division of Iron Mountain, which essentially functions as a development company within an operations division.

Globally, the company’s profile has over 800 properties. Of these properties, the organization owns approximately 25 percent and leases the rest. Iron Mountain’s real estate division acquires properties for its other divisions. Adds Ryan, “The reason we are different is that we really run a real estate company instead of an operating company.” The organization builds a number of facilities itself. In addition to its construction duties, Iron Mountain owns and leases buildings; handles property management, construction, and financing; and even leases to tenants when there is an excess of commercial space.

Iron Mountain’s real estate division is lean considering the organization’s large number of properties. “We are very hands-on,” says Ryan. Security and daily maintenance issues are outsourced; however, the majority of the real estate duties are handled in-house. Some construction projects are handled internally, while other projects are build-to-suit and leased by the organization.

No White Elephants

“Our motto is, ‘No generic warehouses!’ ” says John Haydon, director of real estate, Iron Mountain, Boston. With 20 years of experience in all areas of real estate including finance, construction, development, leasing, buying, and selling, Haydon has been with Iron Mountain for five years. Company management has made the commitment that buildings or building sites should be designed to have multiple uses – beyond Iron Mountain’s needs.

Generally, Iron Mountain buildings are standard warehouses with 38 feet of extra height. Recently, the exteriors of the company’s buildings have been designed to resemble traditional office buildings rather than unattractive warehouses. Iron Mountain’s box business facilities’ slab requirements far exceed the average, while the electrical requirements are often minimal.

Heating, ventilation, and air-conditioning (HVAC) requirements of box business facilities are also usually minimal. The box business warehouses are deliberately low-tech; however, the facilities management department strives to ensure heat is dispersed properly in these buildings. In certain high-humidity regions, such as the Deep South, moisture control in these simple structures is crucial.

The company’s data storage facilities are as different as day from night compared to its box business. In terms of HVAC systems, humidity requirements, and fire systems, Iron Mountain’s data storage facilities mirror high-tech data centers. The organization’s data storage facilities are constructed without raised floors and feature dock areas to facilitate data transmittal. Iron Mountain is continually seeking cost-effective, more efficient solutions to maintaining these critical, sensitive facilities.

New Adventures

For Iron Mountain’s latest venture – the secure shredding business – con—fidential documents are shredded and sold for packaging. These shredding facilities are designed as traditional warehouse structures mar—ried with a small component of office space and a large truck area. On the other hand, three underground storage facilities, located in Missouri, Pennsylvania, and New York State, are anything but standard.

“There is no way of describing [them],” says Haydon. Dedicated to storing extremely valuable information, these specialized spaces are depleted mines totaling 2 million square feet. “We are not interested in storing an antique car; our focus is on media,” says Haydon. These former mines demand water filtration, scaling, protection from falling rocks, and fresh air intake.

There has been increased interest in these highly secure storage spaces since the heightened security resulting from Sept. 11. These facilities store for diverse industries, including the motion picture industry, the government, and nuclear agencies.

“Our group sees each other every day; trust me, the communication exists,” says Rooney. Heading the company’s construction department, he directly coordinates with Iron Mountain’s project management team and large staff of facilities managers. Communication is key to meeting the needs of Iron Mountain’s many business divisions.

“The outside customers for us are the other individual divisions,” says Rooney. Adds Haydon, “It is a fairly intense process when it comes to the real estate side in developing a consensus as to when a building is needed, how big the building should be, and where exactly it should be located.” One of the biggest changes at Iron Mountain has been its increase in volume. In the last three years, the company has seen the number of annual projects increase from 10 to over 40.

The real estate department is well-coordinated to create space precisely when needed. “We try to time it as closely as possible to our real need, and that is an interesting challenge,” says Haydon. To meet the challenge, Rooney holds weekly meetings with his facilities managers. He also interfaces with the vice presidents and executive vice presidents of the regions. The company relies on e-mails and conference calls to aid effective communication for the far-flung organization.

The real estate department heads also travel extensively to oversee projects. “Because what you hear vs. what you see is different, it is critical you get out and see what is going on,” says Haydon. The company holds regional meetings in which different divisions participate.

“We go into the field because it helps us control costs and achieve consistency,” says Ryan. To maintain consistency, the real estate team makes the majority of construction and modernization decisions. Notes Haydon, “If you are asking local people to make real estate decisions, they might be uncomfortable handling the situation or too busy running their primary business and it might be difficult to get a good, quality decision every time.”

Iron Mountain has developed strident minimal standards for its facilities, both acquired and newly constructed. “We have programs in place to bring all [the acquired properties] up to our minimum Iron Mountain standards,” says Ryan. Over the last few years, the company has spent millions on upgrades to the acquired facilities.

“‘Minimum’ is not a negative term. We have a certain level of quality,” says Haydon. Iron Mountain always has a strict strategy to best utilize newly acquired facilities. For example, in the past three years, the organization has vacated 50 buildings because these facilities either could not meet Iron Mountain’s minimum standards or it would be economically infeasible to raise the facilities to these building standards.

The company has always had performance standards for its facilities. Frequently, the real estate team tackles acquired buildings that do not reach these performance standards. Ryan and his team are also continually reviewing and updating Iron Mountain’s standards. “We have raised the bar against ourselves,” says Ryan.

“We are willing to make an investment. We are willing to stay in a building, but we want people to know we are willing to leave if we cannot reach the standards we need,” says Haydon. During summer 2003, Iron Mountain acquired the Information Management Services unit of Hays PLC, one of its largest competitors in Europe. The company has been challenged with evaluating over 80 newly acquired facilities and determining which buildings fit into Iron Mountain’s future strategies.

“We always look at a piece of land and come up with a game plan to increase its value,” says Rooney. Last year’s acquisitions represented 50 buildings. Outside of acquisitions, the company has been adding millions of square feet of warehouse space annually. By the end of 2003 fiscal year, the construction division of Iron Mountain will command a budget of over $70 million.

The Inside Story

For a year and a half, Iron Mountain has been participating in an active energy-efficiency program that focuses on life-cycle costs and efficiency issues. Most of the company’s energy needs fall into two categories – lighting and HVAC—and these are the main areas the real estate division is focusing on currently. “We are trying to lower the costs on our building structures. That is always the challenge,” says Ryan.

For energy savings, the company is initiating energy-efficient lamps and occupancy sensors in its warehouses. Iron Mountain is also looking into efficiency and transportation issues. The company is reviewing a variety of transportation studies on how to use less gasoline while providing the same level of service, as well as examining routing and locations. Rooney spearheaded these initiatives to help his company look beyond initial costs and make decisions based on life-cycle savings as well. “The passion is to drive our costs down,” says Rooney.

Because of the large amount of critical data and the sheer volume of paper that Iron Mountain houses, security and fire safety are paramount. With card readers, sensing devices, and electronically controlled doors, access control to company facilities is tightly managed.

“Iron Mountain is definitely a leader in fire systems when it comes to protecting its property,” says Rooney. Rooney is a member of numerous fire boards and the company is very active within the Quincy, MA-based National Fire Protection Association. The real estate team also keeps a stable of fire engineers to continually improve upon existing systems.

The Northborough, MA, facility is a fine example of the company’s commitment to fire safety. In addition to smoke detectors and sprinklers, Iron Mountain has developed its own metal racking system to support its customers’ boxes. Channels in these racking systems reduce the chance of water damage to the cardboard boxes in the event the sprinkler systems are activated. “We are very proud of our system. We take our racking very seriously,” says Rooney. Two- and four-hour firewalls offer the facility additional safety.

This seven-story facility is completely open from top to bottom with no floors. With 50,000 square feet, the structure could be expanded to 300,000 square feet if necessary. Although the Northborough warehouse facility is a typical single-use Iron Mountain building, its land site has many possibilities for future development. This warehouse holds 6 million sealed paper-filled cardboard boxes, as well as numerous open medical files that are accessed frequently. Boxed information at Iron Mountain is typically accessed very infrequently – roughly two percent annually.

To save on energy costs at the Northborough facility, Iron Mountain has placed timer-linked lighting on alternate levels. Main aisles in the facility feature continuous lights. The building’s air circulation equipment facilitates heating and cooling. “A building this tall practically forms its own environment. Without air circulation, in July it would be 140 degrees in here,” says Geoff Tait, MX facility manager, Iron Mountain, Northborough, MA. Jokes Rooney, “I’ve never heard a box complain about the temperature.”

Seemingly endless stacks of anonymous boxes and long rows of dimly lit racks make up the imposing Northborough facility. To the casual observer, this warehouse is an incomprehensible maze. “It takes a little while to become accustomed to, but soon you get to know it like the back of your hand,” says Tait. At the Iron Mountain warehouses, new employees are paired with senior co-workers for three to four weeks to learn each facility’s layout. Staff members’ work assignments are task-oriented to aid with wayfinding.

New Heights

Records management has become a vital key in modern-day business. “In the past, the records and information division was in the back room. Now it is in the boardroom,” says Ryan. Because of this, records management companies have experienced tremendous growth in the last two years.

Increasingly, companies are calling in records management firms to provide consultation for records retention. There is also a growing need from healthcare organizations to securely store patients’ records while providing on-demand imaging of X-rays and medical records to provide superior care. To meet this new need, Iron Mountain has several 24/7 facilities in major cities that can provide these vital records.

Just as records management is coming to the forefront, so has Iron Mountain. Growing by leaps and bounds, the organization has plans to expand into further international markets in the near future. The real estate division is primed to tailor its facilities to fit its organization’s growth and new business ventures. Moreover, with its strengths and flexibility, the organization can adapt to the ever-changing needs of the business world.

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